Surviving Bankruptcy

One of the biggest benefits of filing for bankruptcy is the Automatic Stay. If you currently have creditors constantly harassing you; collection agencies constantly calling you on the phone and/or sending threatening collection letters; law suits pending in court; wages being garnished; or many other stressful collection attempts including repossession and foreclosure, the Automatic Stay can help stop these attempts to collect debt or repossess property immediately.

What is the Automatic Stay (11 U.S.C. §362)?

The automatic stay is an injunction which prevents most creditors from continuing their collection activities against the bankruptcy petitioner. The automatic stay becomes effective the moment the petitioner files their bankruptcy petition. All harassing phone calls, letters, law suits, wage garnishments, foreclosures, repossessions, and other types of collection activities must stop immediately. This provides the bankruptcy petitioner a great deal of immediate relief.

Does the Automatic Stay Apply to All Creditors?

While the automatic stay does apply to most creditors, there are a very select group of creditors that it does not apply to. One such example is an existing eviction action brought by a landlord against a tenant. If you have questions regarding whether the automatic stay will apply to a particular creditor you should contact an experienced New Jersey Bankruptcy attorney.

Does the Automatic Stay Apply to Secured Creditors?

Yes, creditors of secured loans such as an auto loan or mortgage are subject to the automatic stay. All collection activities, including repossession and foreclosure, must immediately cease once the bankruptcy petition is filed.

Can Creditors Get Relief from the Automatic Stay?

Yes, certain creditors can make an application to the bankruptcy court for relief from the automatic stay. If a creditor makes an application to the bankruptcy court, and their application is granted, they can immediately begin collection activities against the bankruptcy petitioner. However, it can take several months before a creditor’s application is granted.

How Long Does the Automatic Stay Last?

The automatic stay will last the duration of the petitioner’s bankruptcy proceeding, except in situations where it does not apply or a creditor is granted relief. This means that the day that the petitioner files for bankruptcy until the day that he/she is granted a discharge almost all, if not all, creditors will be prohibited from contacting the petitioner and taking any further collection actions. The Cassidy Law Firm is conveniently located in Shrewsbury, New Jersey. We have experienced New Jersey bankruptcy attorneys that can help answer your bankruptcy questions and we provide a free initial consultation regarding your financial situation. Please call us at 732-747-3999 or contact us online. We service all of Monmouth County, Ocean County, Middlesex County and all of New Jersey.